Castlefield Stock Story – Optima Health

In this Castlefield stock story, Investment Analyst David Gorman introduces Optima Health – a UK-based occupational health services and software provider helping organisations keep people in work and supporting better health outcomes.

The recent Budget delivered very little cheer for businesses, investors and “working people,” as Rachel Reeves looks for tax revenue wherever she can find it. A major reason the Chancellor has again increased the tax burden on us is to help pay for the ever-increasing UK welfare bill.

In February 2025, 24 million Britons claimed some combination of the seventeen different benefits available from the Department for Work and Pensions (DWP). Of this number, 13.2 million were of state pension age, while around ten million were still of working age. These numbers have increased since the pandemic.¹

Among those who aren’t working, 2.8 million people are economically inactive due to poor health.²

Long term sickness is damaging for three main reasons: the profound effect on the individual concerned, the loss to the economy of a productive person and the cost to the taxpayer of all this inactivity.

A 22-year-old who falls out of work for health reasons could be more than £1 million worse off over the course of their lifetime.

The government is aware of this problem and the DWP recently published a report entitled Keep Britain Working.³ Expanding on the three reasons for long-term sickness mentioned above, the report points out that:

A 22-year-old who falls out of work for health reasons could be more than £1 million worse off over the course of their lifetime than if they had been sustained in employment and the impact on [their] wellbeing of being out of work is immense.

Employers lose on average £120 a day in profit from sickness absences, which are at a 15-year high, and they face costs to replace staff which can stretch into the tens of thousands each time. This causes disruption, lost capacity and unplanned costs.

The state faces an unsustainable cost from economic inactivity due to ill-health of £212 billion per year, equivalent to 7% of GDP or nearly 70% of the income tax we pay, through lost output, increased welfare payments and additional burdens on the NHS.⁴

So, what keeps people off work? The main reasons for absence are musculoskeletal disorders such as back pain, arthritis and tendonitis as well as mental health issues like stress. Both conditions respond to early intervention but, unfortunately, this is hard to access from the NHS when it is most needed. This situation presents an opportunity for Optima Health PLC, whose shares we hold in the TM Castlefield Thoughtful UK Smaller Companies Fund.

Optima is a provider of occupational health software and services, supporting organisations across the public and private sectors.

Optima is a provider of occupational health (OH) software and services, supporting organisations across the public and private sectors. Based in Sheffield, it is one of the largest such providers in the country, with about 10% of the market;⁵ it serves millions of employees and operates from more than 50 clinics in GB and Ireland. Optima’s team of 800 clinicians includes doctors, occupational health nurses, occupational therapists, physiotherapists, psychologists, nurses and physiologists. Within the private sector, it specialises in supporting workers in the energy and utilities, construction, manufacturing, rail, transport and financial sectors. Optima also provides services to Blue Light organisations and is one of the largest OH providers to the NHS, as well as to central and local government. Clients include Amazon, AstraZeneca, Bentley Motors, BP, Curry’s, Ikea, London Ambulance Service, Met Police, Mulberry, Siemens and Toyota.

Optima’s services include health assessments, employee immunisation programmes, physiotherapy and rehab as well as mental health support. Most work-related diseases have several causes and adverse health effects can appear sometime after the exposure. OH interventions, such as those provided by Optima, include the protection of workers and the prevention of accidents or injuries at work, the prevention or early detection of disease and maximising the health benefits from a return to work, such as more physical activity, social contact and financial security, all contributing to improved mental health.

Optima Health shares have performed well since the company floated and, given the opportunities available, we don’t think its next financial results will disappoint.

Written by David Gorman 

References

1  Benefit Combinations: Official Statistics to February 2025 - GOV.UK 

2  LFS: Econ. inactivity reasons: Long Term Sick: UK: 16-64:000s:SA - Office for National Statistics

3  Keep Britain Working: Final report - GOV.UK 

4 Keep Britain Working: Final report - GOV.UK 

5 Annual-report-Financial-statements-FY25.pdf page 1